Shipbuilding group Damen wanted to optimize the management of its internal projects. For this purpose, the internationally operating company has set up an Internal Project Management Office (iPMO). The iPMO was built step-by-step from scratch. The family-owned business now has a much better insight in the mechanisms underlying the links between the projects and their costs, enabling them to take informed decisions.
“We wanted to have an optimal deployment of our resources” says Sander Alles, iPMO manager at Damen about the rationale for installing the Internal Project Management Office (iPMO). “Before this, we had a PMO for the business as a whole that focused on operations, but there was no internal PMO.” Damen is an internationally operating shipbuilding company with over 30 subsidiaries. The family-owned business is engaged in the design, building and maintenance of ships.
“We wanted to obtain insight in the mechanisms underlying the links between projects; what is the mutual relationship between projects?”
The iPMO was set up within the IT-department and focused primarily on IT-projects. “99% of the change projects within Damen had an IT-related component,” Sander explains. “As a consequence, everybody was looking at us to take on issues and it became increasingly difficult for us to focus on our own tasks and to control our workflow. This needed to be canalized.” The main objective was to get a grip on these projects with an IT-related component.
The iPMO was built step-by-step from scratch. “The first step was the inventory phase, which consisted of mapping the ongoing initiatives,” Sander says. “After this, we turned these initiatives into projects. For some initiatives this went smooth, for others it was more complicated. We helped the initiatives by determining specific targets and concrete objectives for the projects.”
The next step focused on the costs. Sander: “Here we examined the costs per project. What are the costs associated with the initiatives? And what is the required human resources capacity of the projects”?
The third step consisted of clustering the projects in a comprehensive way. “During this phase, we fine-tuned the clusters further into logical groups, and the PMO made an assessment of the contribution of each project to the strategic goals of the company,” Sander continues. Damens strategic objectives such as continuity, security, compliance, optimization and innovation served as the basis for this. “The clustering served to obtain insight in the mechanisms underlying the links between projects; what is the mutual relationship between projects?”
Transparent decision making
The arrival of a new IT director was paralleled by an adjustment of the governance structure of the IT department. “With the introduction of a portfolio board and a change approval board, the new governance structure is characterized by a more transparent decision making process.”
“This structure enables clear and efficient decision making, both regarding the content and the processes. This is essential to the management of projects,” says Jan Dirk Hogendoorn, consultant at Finext and closely involved in the implementation of the Internal Project Management Office (iPMO).
Passing through these phases is necessary in order to implement a PMO from the very basis. “In the first half of the year we have mapped the projects, after which we could focus on the portfolio management,” Jan Dirk says. “For both phases the governance structure is the basis. A PMO provides the relevant input on the projects and enables decision making regarding the appropriate projects; the latter is portfolio management”.
The basis first
Building a PMO is a process of making many choices. “Deciding which aspect of the PMO needed to be tackled first was a real issue,” Sander tells us. “We chose our priorities carefully and we started off one step at the time. We took a global first approach by first determining which projects we needed to focus on, before substantially dedicating resources for resource management or risk management.”
“Now, the decision making process is based on facts instead of gut feeling”
When considering the steps, it was important to get the employees of Damen on board. “Acceptance is less a matter of mandate than of convincing arguments.” The management does play an important role. “It is important to be backed by senior management; the IT director gave us his full support.”
In order to have all stakeholders on the same track, the iPMO had organized training sessions for all departments involved in strategic projects. Sander: “This provided an opportunity to establish the iPMO internally on the one hand and, on the other, to provide the employees with training in the new project management processes.”
The results of the implementation of the iPMO are very well received by the ship building group. “The decision making process is now based on facts instead of gut feeling,” Sander says. “We gained insight into the aspects that are improving, because it is now clear how every project will contribute.” “Tasks are now being performed in a more efficient and effective way, which contributes to attaining the strategic goals of the IT department,” Dirk Jan says.
Moreover, Damen now has the means to take informed decisions when prioritizing projects. Every single project contributes to the results of Damen and matters to us, but sometimes we need to prioritize, for instance regarding the allocation of resources,” Sander says.
“These decisions used to be complicated; now they have become central decisions that everyone is aware of. In addition to making informed decisions when setting priorities, we now benefit from the fact that the resources are now being considered from one single point of view.” “This is what portfolio management is about; making joint decisions when setting priorities.
Practical and content support
The project staff are also positive about the results of the Internal Project Management Office. “They can build on the results of the successful implementation of the iPMO, “Sander tells us. “They welcome both the practical support, like the drafting of project briefs, as well as the substantive support we offer them. For example, when we ask questions such as ‘what products are you going to deliver’ and ‘what is the goal of the project?’ This helps all stakeholders to get a clear picture. Jan Dirk: “A good PMO helps in formulating clearly defined and shared organizational goals so they can be internalized and efficiently managed.”
While the original objectives of the iPMO were to support IT-projects, it is now actively involved in all departments. “We are also involved in the drafting of the annual plans and the implementation of the business plans for all departments; the projects serve as the axis of the strategic goals,” Sander says. “People know to find us and consult us; they know where they can obtain certain knowledge within the Damen organization.”
Sander would like to see a higher degree of phasing the projects as the next step in project management. “We would like to implement formal moments during which the steering group can ascertain that the previous phase of a project is properly completed. This will be the basis for giving the green light to move to the next phase. To avoid that projects go astray, the next phase needs to be clearly defined.”
For other organizations that are considering the implementation of a Project Management Office, Sander has the following recommendation: “The implementation of a PMO might seem too big a task, but it is certainly an attainable objective. It does however require commitment and support from senior management.”